JFAC approves $415.2 million in FY2025 Medicaid supplementals and $674.2 million in FY2026 Medicaid adjustments

The Joint Finance-Appropriations Committee on Wednesday approved a package of FY2025 supplementals and FY2026 budget adjustments for the Department of Health and Welfare's Division of Medicaid that together fund managed-care compliance work, changes tied to the Idaho Behavioral Health Plan and an ongoing hospital assessment mechanism to draw federal matching funds. The FY2025 supplemental passed with a combined total request of $415,226,800 and the FY2026 adjustments were approved with a total request of $674,192,600; the motions carried with a majority (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent), and both measures will proceed as bills with a new "pass" recommendation.

Alex Williamson, budget and policy analyst with Legislative Services, told the committee the FY2025 package was presented as a single omnibus supplemental to save time. "First up is the fiscal year '20 '20 '5 supplementals," Williamson said, and then walked members through the itemized requests.

The supplemental and follow-on FY2026 actions are designed to cover: a managed-care external quality review (EQR) contract required by the Centers for Medicare & Medicaid Services (CMS); implementation and configuration costs related to the Idaho Behavioral Health Plan; an updated Medicaid forecast reflecting higher-than-expected caseload and utilization; a capitation-rate increase for the Idaho Behavioral Health Plan; and a hospital assessment payment that enables the state to draw additional federal funds under a revised upper payment limit calculation.

Key dollar figures cited by Williamson and in the motions: $1,350,000 (one-time) for the managed-care external quality review; $695,500 (one-time) for Idaho Behavioral Health Plan system configuration changes; $113,849,300 (one-time) for an updated Medicaid forecast for FY2025; $108,821,400 (one-time) for a capitation-rate increase for the Idaho Behavioral Health Plan; and $190,510,600 (one-time) in hospital assessment funds. Williamson said the total one-time split for the FY2025 supplemental was $511,400 from the general fund, $77,243,700 from dedicated funds and $337,471,700 in federal funds, for a total of $415,226,800.

On the FY2026 adjustments and ongoing items, Williamson listed ongoing appropriations and actions including making the hospital assessment ongoing to avoid future supplementals, $67,600 ongoing for additional CAHPS surveys required by federal rules, $200,000 ongoing related to implementation of the KW lawsuit settlement (an adult developmental disability resource allocation assessment and court-ordered attorney fees), a $1,100,000 actuary contract amendment (split roughly half general, half federal) to expand actuarial services, ongoing funding for the EQR contract, state share of the MMIS (Medicaid Management Information System) procurement and a $376,124,900 population-forecast adjustment (split $70,800,000 general fund, $305,200,000 federal) to account for FMAP changes, caseload and utilization forecasts.

Senator Wintrow moved the FY2025 supplemental motion on the record: "I move for FY 2025 for the Department of Health and Welfare in the division of Medicaid at $1,350,000 for the managed care external quality review ... and add $190,510,600 for the hospital assessment," and Representative Handy seconded the motion. Committee roll calls yielded the vote totals reported by the clerk: Senate 7 ayes, 3 nays; House 6 ayes, 3 nays, 1 absent/excused. The committee chair announced the motion "will go forward as a bill with a new pass recommendation."

Representative Furness moved the FY2026 JFAC program-maintenance package that included the ongoing hospital assessment, MMIS procurement, the population forecast adjustment and other items; the motion reported totals of $70,141,900 general fund, $88,963,700 dedicated funds and $515,087,000 federal funds (total $674,192,600). That motion also passed by the same recorded margin and will proceed as a bill with a pass recommendation.

Committee members and staff emphasized that several elements are driven by external requirements. Williamson and other members noted the EQR and additional CAHPS surveys are federally required. Senator Cook described the hospital assessment as a fronting mechanism to access federal funds, saying the state draws down an additional federal share under the upper payment limit methodology and returns funds to hospitals, with the state receiving an approximate 30% benefit on the total amount hospitals can access. On the actuary contract amendment, Williamson said the division depends entirely on outside actuarial firms for rate setting, risk evaluation and forecasting: "the division of Medicaid does not currently have any actuaries on staff in house, and so they are completely reliant on, an actuarial firm, providing these services."

Members also discussed implementation mechanics. Williamson said the MMIS procurement is a multi-year IT replacement with state share dollars already set aside in a dedicated fund; the appropriation frees up funds as project milestones are met. On the KW lawsuit item, Williamson described it as tied to a court mandate: the request would fund the resource-allocation assessment tool and pay court-ordered attorney fees.

The committee approved supplemental bill language and reporting requirements by unanimous consent. The approved language directs the Division of Medicaid to explore a value-based payment model for outpatient addiction treatment and report findings to JFAC by Jan. 15, 2026, to transition multi-year Medicaid contracts to align with the state fiscal year (with a Jan. 15, 2026 report on progress), to add an annual emergency Medicaid report on clients served and expenditures (due to JFAC by Sept. 15 following each fiscal year), and standard federal-funding restriction and conditions language included in other budgets.

The committee chair and members noted staff workload concerns tied to the new reporting requirements; Senator Wintrow observed the language will require staff time and that no additional staff funding was included specifically for the new reports. Williamson acknowledged that some items (for example, moving extended employment services into Medicaid) were net-zero department-wide transfers and that some trailer items tied to House Bill 345 are contingent on waivers and other actions outside JFAC.

Votes at a glance: FY2025 Medicaid supplementals — approved (Senate: 7 ayes, 3 nays; House: 6 ayes, 3 nays, 1 absent/excused; total ayes 13, nays 6). FY2026 Medicaid JFAC program-maintenance package — approved (same vote totals). Both measures proceed as bills with pass recommendations.

The committee adjourned and set work-group meetings to continue technical review the following morning.